In the U.S., repossession laws are mandated at the state level. Depending on where you live, your personal possessions may be repossessed by a creditor if you cannot make payments or, in the case of vehicles, also if you cannot meet the state's minimum auto insurance requirement. Most repossessions involve a vehicle, although a creditor can legally take back any item if payments are late.
The timeline for legal repossession varies by state and by individual contract, but it's important to realize that the creditor does not need to warn you or give notice before the repossession occurs. In fact, a repo man has full access to your exterior property, and may even take your vehicle without verbal permission. That said, the creditor must follow the rules of the original contract, which stipulate the definition of "default" status.
Breach of Peace
A repo man has full access to your exterior property and your vehicle, but he may not violate the breach of peace in his effort to retrieve your possessions. The definition of a breach of peace varies by state, but usually involves harassment, damage to your personal property, or entering a locked garage, which is considered off-limits interior property. If you feel that a repo man has broken your state's breach of peace laws, you may legally seek damages in court.
While your vehicle may be repossessed, the repo man or creditor cannot legally take any personal items left inside and must notify you immediately once the items are found. Otherwise, you may take the creditor to court for theft.
Reclaiming Your Repossessed Vehicle
Once your vehicle has been repossessed, you can usually get it back by paying the balance due on the loan, plus any repossession charges. Keep in mind that you must act fast; the creditor can resell the vehicle at any time, although some states have strict policies on the timeline and procedures for sale. If the creditor successfully sells your vehicle but the sale price does not satisfy the total loan amount, you will be responsible for paying the leftover balance, which is known as a deficiency. If you feel that the vehicle was not sold in a commercially-reasonable manner, you can contest the deficiency payment in court.
If you feel that your vehicle is in danger of repossession, you may want to consider selling the vehicle, which will absolve you of the debt, or finding a friend or family member to take over payments. Another option is to file bankruptcy, which in some cases will absolve the debt while allowing you to keep the vehicle. The Federal Trade Commission recommends talking to your creditor about a payment plan or, if that does not work, a voluntary repossession, which can at least save you money on the repossession charges.